March 2018 Special E-update

Sexual harassment is a conduct and behaviour issue for employers and is expressly prohibited by Australia’s anti-discrimination legislation.

In this special e-update we will look at conduct and behaviour in the workplace, what the law defines as conduct that is sexual harassment and provide some suggested strategies to assist employers in managing sexual harassment issues in the workplace.

Conduct and behaviour in the workplace

Employee conduct and behaviour in the workplace is managed by reference to standards set by employers.

These standards are best set out in written policies and procedures, outlining the employer’s expectations of what is acceptable and unacceptable conduct and behaviour in the workplace and the potential consequences of breaching the policies and procedures.

Recent unfair dismissal decisions in the Fair Work Commission (FWC) provide support to employers who enforce behavioural standards and terminate an employee’s employment for inappropriate behaviour or misconduct.

In Parker v Garry Crick’s (Nambour) Pty Ltd as The Trustee for CRICK UNIT TRUST T/A Cricks Volkswagen [2017] FWC 4120, the FWC upheld the dismissal of a finance manager who told a 21-year-old female co-worker that “if you ever call me that business guy or that finance guy, I will backhand you. I don’t care if you are a girl”, and, in response to her concerns that some customers had made her feel uncomfortable, “Just show them your tits, you will be fine”. The FWC found that the seriousness of the manager’s misconduct significantly outweighed any procedural deficiencies that may have been present in the employer’s disciplinary process and upheld his dismissal as fair.

This message was also confirmed in Sapienza v Cash in Transit Pty Ltd T/A Secure Cash [2018] FWC 607, where the FWC upheld the summary dismissal of a banking courier who engaged in inappropriate conduct and behaviour by getting physically close to employees of clients, including placing his arms around their waists and asking the 18 year-old employees of one client for kisses. On one occasion, the banking courier even suggested that a client’s employee leave her boyfriend so that “we can run away together”. The FWC rejected the banking courier’s justification for his conduct – that such behaviour was common in his culture and that “as an Italian he was used to affection and showing affection”. The FWC found that the actions were “improper, unprofessional and naïve, to say the least” and that if the banking courier was not aware that such conduct was inappropriate, then he ought to have been.

In Colwell v Sydney International Container Terminals Pty Ltd [2018] FWC 174, the FWC upheld the summary dismissal of an employee who sent a pornographic video via Facebook Messenger to 19 other employees, some of whom had found the video offensive but had not made any formal complaints to their employer. Without coming to a definitive conclusion on whether or not this conduct was sexual harassment, the FWC found that the employee had engaged in misconduct by sending the video contrary to the employer’s standards on expected conduct, bullying and harassment and – in circumstances where the employer had spent the last three years creating a workplace culture that was free from sexual harassment and encouraged females to join the stevedoring industry – this provided a valid reason for his summary dismissal.

Employee conduct and behaviour as sexual harassment

Employers and employees need to be acutely aware that inappropriate conduct and behaviour may amount to sexual harassment. With State and Federal anti-discrimination legislation prohibiting sexual harassment in employment, it is important for employers to understand what sexual harassment is at law and the risks – legal and reputational – of failing to address and prevent such conduct.

Sexual harassment in employment

The Sex Discrimination Act 1984 (Cth) (SD Act) states under subsection 28A(1) that a person sexually harasses another person if:

(a) The person makes an unwelcome sexual advance, or an unwelcome request for sexual favours or engages in other unwelcome conduct of a sexual nature towards the other person; and

(b) The person’s conduct takes place in the circumstances where a reasonable person would have anticipated the possibility that the other person would be offended, humiliated or intimidated.

Unwelcome conduct of a sexual nature includes statements made verbally or in writing to a person (or in the presence of a person) that are of a sexual nature. Whether conduct is unwelcome is determined on a subjective basis from the point of view of the harassed person.

Section 28B of the SD Act provides that in employment it is unlawful for:

employers to harass employees or contractors;

employers to harass prospective employees or prospective contractors;

employees to harass other employees or prospective employees;

contractors to harass other contractors;

partners in a partnership to harass another partner or a prospective partner in the partnership; and

workforce participants to sexually harass other workplace participants at the workplace.

The SD Act requires application of the objective “reasonable person” test: whether a reasonable person would have anticipated that the conduct would offend, humiliate or intimidate the other person. Under subsection 28A(1A), the SD Act provides guidance as to what circumstances are to be taken into account when considering this, including but not limited to:

Case law that considers anti-harassment legislative provisions can provide some useful guidance to employers on the application of the law to real workplace situations.

In Kordas v Ruba & Jo Pty Ltd t/a Aztec Hair & Beauty [2017] NSWCATAD 156 (Aztec Hair), Mr Kordas, who was an apprentice hairdresser, alleged that he was sexually harassed by his manager and another hairdresser who was his trainer, in contravention of the Anti-Discrimination Act 1977 (NSW) (AD Act).

Mr Kordas claimed that he was subjected to unnecessary touching of a sexual nature, including that his palm was stroked by the manager when he was given money, that he was slapped on the bottom with a ruler by the trainer and that the trainer made sexual comments including calling him his “bitch” and referring to them as a “gay married couple”.

In determining whether the conduct was that which a reasonable person would have been humiliated or intimidated by, the NSW Civil and Administrative Tribunal noted that Mr Kordas was an apprentice within his probation period and was not in a position of power. Accordingly, it found that a reasonable person in these circumstances would have anticipated that the employee would have been humiliated or intimidated by the conduct.

The Tribunal found that the conduct was sexual harassment and the employer was vicariously liable for the conduct of its employees, being the manager and the trainer. The employer was ordered to pay $30,000 to the employee.

It is irrelevant to the objective reasonable person test to consider whether or not the person perpetrating sexual harassment thought or perceived the conduct to constitute sexual harassment or whether or not they intended the conduct to be sexual harassment. Take, for instance, circumstances where the alleged perpetrator contends that they did not mean to cause offence as was argued unsuccessfully by the employee in the case of Sapienza v Cash in Transit discussed above.

In Collins v Smith (Human Rights) [2015] VCAT 1029, Ms Collins claimed that between January 2013 and April 2013 she was sexually harassed by Mr Smith in the workplace in contravention of the Equal Opportunity Act 2010 (Vic) (EO Act). This conduct included physical contact, sexual assault, sexual propositions, and verbal and written communication in attempts to pursue a sexual relationship. Mr Smith denied that some of the conduct occurred or where it did occur, that it was not unwelcome.

In one incident, Ms Collins alleged that Mr Smith called her into the staff room and told her “I cannot get you out of my head” and then tried to kiss her on the mouth. Mr Smith argued that Ms Collins had been flirty and made regular physical contact with him which lead him to form the opinion that she was interested in more than a professional relationship. In another incident, Mr Smith placed a Valentine’s Day card with the lyrics of love songs inside Ms Collins’ handbag. Mr Smith submitted that the incident was “a bit of fun” and was a “joke” and that Ms Collins also played jokes on him such as decorating his bike at Christmas.

The Victorian Civil Administrative Tribunal did not accept Mr Smith’s explanations, finding that there was no evidence that Ms Collins had engaged in any flirtatious behaviour toward Mr Smith and that decorating a bike was different to giving her a private Valentine’s Day card containing romantic song lyrics. The Tribunal found that Mr Smith had engaged in sexual harassment and in separate proceedings ordered Mr Smith pay damages to Ms Collins in excess of $330,000.

Sexual harassment in the “workplace”

The significance of when and where sexual harassment may take place was considered by the Federal Court of Australia in Ewin v Vergara (No 3) [2013] FCA 1311. Ms Ewin claimed that she was subjected to unlawful verbal and physical sexual harassment in the workplace by Mr Vergara who, at the time the harassment took place, was a third party contractor working in Ms Ewin’s team. Some of the allegations of sexual harassment took place outside of the physical “workplace” including at a work function at the Melbourne Aquarium but continued when they returned to the office.

A work drinks function had been organised at the Melbourne Aquarium which was then to continue at a nearby bar. Ms Ewin became quite ill at the bar and could not remember most of the events of the night but recalled that she and Mr Vergara had returned to their office. Ms Ewin alleged that Mr Vergara sexually assaulted her and had sexual intercourse with her when she did not consent or was unable to provide informed consent. This conduct took place in the corridor leading to the office.

Mr Vergara argued that subsection 28B(6) of the SD Act (which makes sexual harassment of workplace participants by other workplace participants unlawful) only applied to conduct during work hours whilst at the workplace to perform work. Mr Vergara claimed that the alleged conduct did not take place at the “workplace” but rather in the common area of the office building, being the corridor to the office.

The Federal Court noted that subsection 28B(6) was aimed at addressing sexual harassment between members of the same workforce who share the same workplace. For the Federal Court, “workplace” as defined under subsection 28B(7) had a wide meaning: ‘A “workplace” is not confined to the place of work of the participants but extends to a place at which the participants work or otherwise carry out functions in connection with being a workplace participant.’

The Federal Court recognised that work or work functions may be held at places and locations different from the ordinary place of work and considered the objective of the legislation, which is to eliminate sexual harassment in the workplace, would be undermined if common areas such as entrances, lifts, kitchens and toilets were excluded.

For the Federal Court, it did not matter that the conduct occurred out of work hours or that Ms Ewin and Mr Vergara were not in the office building for a work-related purpose. Accordingly, the Federal Court found that Mr Vergara had engaged in sexual activity, including sexual intercourse with Ms Ewin which was unwelcome at the workplace and accordingly contravened subsection 28B(6) of the SD Act.

Employers’ vicarious liability

Sexual harassment is a serious issue for employers for multiple reasons, from the health and safety of employees, to the development of a culture that promotes inclusion. Another reason that employers should take the elimination of sexual harassment seriously is section 106 of the SD Act which provides that employers will be held vicariously liable for the conduct of their employees if that conduct is connected to the employment or occurs during the course of the employment. Accordingly, employers have a responsibility to ensure that the workplace is free of sexual harassment.

Employers will not be held vicariously liable under subsection 106(2) of the SD Act if they can demonstrate that they took “all reasonable steps” to prevent the harassing conduct. The onus rests on the employer to demonstrate this. The Federal Court of Australia, in Richardson v Oracle Corporation Australia Pty Limited [2013] FCA 102, commented that the test was ‘a difficult one to satisfy’. In this matter, Ms Richardson alleged that she was sexually harassed by another employee and that the employer (Oracle) was vicariously liable for the conduct. The conduct included sexual slurs in front of other employees and sexual advances in private including by text messages and over the phone.

The Court held that the conduct was sexual harassment. However, Oracle argued that it was not responsible for the conduct as it took reasonable steps to prevent it. Oracle submitted that:

employees were required to comply with its Code of Conduct which set out its policy for a harassment free workplace;

employees were required to complete online sexual harassment training every two years;

it had policies in place to investigate complaints and did so promptly, with the employee subject to serious disciplinary action; and

there was no culture of harassment.

The Court however found that Oracle did not take all reasonable steps to prevent the conduct. It noted that the training provided to employees was inadequate and was critical of Oracle’s new Workplace Diversity Policy as it did not refer to Australia’s sex discrimination legislation and did not include clear statements that sexual harassment was unlawful and that employers may be vicariously liable for employee conduct. On appeal, the Full Court of the Federal Court ordered Oracle pay Ms Richardson $130,000 in damages by way of compensation.

In Mathews v Winslow Constructors (Vic) Pty Ltd [2015] VSC 728, the employer admitted that it was negligent in failing to provide a safe work environment and was vicariously liable for an employee’s psychiatric injury sustained after she had been subjected to ongoing abuse, bullying and sexual harassment by other employees and subcontractors for almost two years. The conduct included showing the employee pornographic material, asking the employee about sex toys, making comments and actions of a sexual nature toward the employee and threatening to rape the employee. When the employee complained to the Area Site Manager she was told to “leave it with me” but nothing was done. The Victorian Supreme Court awarded the employee over $1.3 million in damages.

In the Aztec Hair decision above, the Tribunal found the employer vicariously liable for the conduct of the manager and trainer, noting that the manager witnessed the behaviour and did not do anything. The Tribunal also found that that the employer did not take any preventative action at all to ensure a harassment free workplace.

As demonstrated by the case law, sexual harassment or misconduct of a sexual nature is not tolerated in the workplace and employers have significant responsibilities in this regard.

Of course, not all misconduct that has sexual connotations will be characterised as sexual harassment and be capable of being dealt with under the legislation. Regardless, employers should aim to eradicate such conduct in the workplace. Whilst this current social environment may evoke a knee-jerk reaction to all complaints of conduct of a sexual nature, there are some simple and common sense strategies that employers can consider to assist in addressing unacceptable conduct and behaviour, and sexual harassment in particular, in the workplace.

Strategies for employers

Tell employees what constitutes sexual harassment, or unacceptable conduct of a sexual nature, and that it will not be tolerated.

At the very minimum, employers need to have an anti-harassment policy and need to train their employees on that policy.

The policy should clearly define harassment, including sexual harassment, according to the law (as set out above) and should state that any form of harassment or unacceptable conduct of a sexual nature will not be tolerated by the employer.

Employees should understand that if they commit acts of harassment or unacceptable conduct, their employment may be at risk and in extreme cases, the employer may have to refer the employee’s conduct to the appropriate authorities.

Training on the anti-sexual harassment policy should take place regularly, ideally annually, and employees should sign off on their training to acknowledge that they have attended and understood the training.

The purpose of the sign-off is not only to encourage employees to take the matters raised seriously, but also for an employer to demonstrate that it took reasonable steps to prevent harassment in its workplace.

Regular training on the anti-harassment policy could also be coupled with training on the employer’s code of conduct and behavioural expectations more generally.

Make reporting incidents of harassment accessible and take reports seriously

One major barrier to timely action on harassment in the workplace is a lack of access to appropriate reporting mechanisms.

Through a policy or some other easily available resources, employees should be clearly advised of the avenues through which they can report harassment and reassured that reports of sexual harassment will be taken seriously.

Reporting should be accessible and multiple avenues should be made available – for example, employees should be able to make verbal reports to a trusted individual as well as being able to report their experiences in writing.

Employees must also be advised that all reports of harassment are taken seriously by the employer, regardless of the avenue through which the report is received. There should be no such thing as an “informal complaint” or an “off the record report.” All alleged incidents of harassment should be treated the same. As demonstrated in Colwell v Sydney International Container Terminals Pty Ltd, above, an employer does not need to receive a formal complaint for an employee in order to take disciplinary action in relation to conduct inconsistent with its policies.

Employees should also be advised that false or vexatious allegations of sexual harassment will not be tolerated and may result in disciplinary action against the person making the false report.

When a report is received, employers should act quickly and decide on the appropriate next steps. This may involve referring the matter for investigation or gathering other information from the relevant parties. At all times, employers should ensure that the confidentiality of the reporting party and the alleged perpetrator are respected.

Approach the issues with common sense

As reported in the media, a number of large organisations have recently introduced strict policies that extend beyond anti-sexual harassment and delve into workplace dating and personal relationships between employees.

Such policies include the “one-strike approach” which states that an employee has one opportunity to ask a colleague on a date and if that colleague declines, then that is the end of the matter for good.

Whilst these policies may be appropriate for some workplaces, there is certainly no “one-policy-fits-all” approach when it comes to these more nuanced issues. The reality is that many people meet their partners at work and these relationships usually begin with some form of workplace flirtation.

Accordingly, a common-sense approach is required when assessing whether a workplace relationships policy is necessary. In some workplaces, a policy stating that one chance to ask out a colleague is all you get may be appropriate, but it may be entirely unnecessary and met with derision in other workplaces.

The best approach is for an employer to listen to their employees and gauge the temperature of the workforce on these issues before launching any new policy which reaches beyond the mandatory anti-sexual harassment position.

Treat your employees like the grown-ups they are

There is unlikely to be an employee out there at the moment who doesn’t have some understanding of the significance of sexual harassment in the workplace as a pervasive social issue.

Employers should not shy away from speaking to their employees about sexual harassment to ensure that they harbour a culture where not only is sexual harassment understood as a concept but it is clear that it is fundamentally not tolerated.

Engaging employees in discussion is an opportunity to have fruitful and meaningful exchanges about the type of inclusive and productive culture the employer wants to promote as well as allowing employees to set the agenda for the type workplace they want to maintain.

This kind of regular and robust discussion can help to inform an employer’s code of conduct and will assist in setting (and reminding employees of) the standards of behaviour expected of them.

For employers, cultivating a harassment-free workplace can be achieved by clearly setting and communicating expectations about standards of behaviour, developing and implementing policies in relation to conduct and behaviour generally and consistently enforcing those policies.

BREAKING NEWS

Unpaid domestic leave entitlements to be inserted into modern awards following FWC decision

As part of its four-yearly review of modern awards, the Full Bench of the FWC has recently issued a decision in relation to family and domestic violence leave. This decision comes after the Full Bench came to a preliminary view in October 2017 that employees should have access to unpaid family and domestic violence leave.

In summary, the Full Bench has decided that employees covered by a modern award will be entitled to five days of unpaid family and domestic violence leave each year. This leave is available to all employees (including casuals) in circumstances where they are experiencing family or domestic violence and the employee needs to do something to deal with the impact of that violence and it is impractical to do so outside of their ordinary hours of work.

The Full Bench has confirmed that the leave will be available in full to all employees at the commencement of each year of service but will not accumulate from year to year.

In coming to its decision, the Full Bench rejected submissions from The Australian Council of Trade Unions who suggested that such leave should be uncapped and available per occasion, as well as from employer parties who suggested that 2-3 days of unpaid leave per annum be made available to employees.

Whilst the Full Bench is still considering the model draft term to be inserted, it has confirmed that once drafted, interested parties (including employers) will be entitled to make submissions on the term.